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BABY BELLS LASH AT MCI FOR ITS LOCAL AD EFFORTS: AMERITECH, PACIFIC BELL COMPLAIN TO FCC ABOUT GIANT RIVAL'S TACTICS

MCI Communications Corp. has been upsetting most of the regional Bell companies with advertising the Bells claim is misleading or even untrue.

Ameritech Corp. last week filed a complaint with the Federal Communications Commission saying an ad touting "complete telecommunications bundling only from MCI" is false under the Telecommunications Act of 1996.

O

FFER TO COMBINE SERVICES

At the heart of the dispute is a claim in which MCI said it plans to offer long-distance and local phone service to business customers in certain markets, including Chicago, Cleveland and Detroit.

The Telecommunications Act states that carriers can only offer bundled services if all the services come from its own facilities within that market.

Ameritech claims MCI plans to offer local service by reselling service from Ameritech's network; MCI claims it's using its own facilities-based services.

"Ameritech needs to get its facts straight," said Gretchen Gehrett, MCI's executive director of advertising and communications.

A campaign by MCI agency Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, warns consumers that the "big Bell monopolies see you as big fat cash cows" and urges them to "stop being milked" by excess access charges that the Bells are charging.

REACHING STATE LEGISLATORS

TV and print ads are still running in state capitals throughout the U.S. targeting legislators.

MCI also built a Web site for the advertising campaign at http:// www.overcharge.com.

"The campaign is factual and is actually doing very well," said Ms. Gehrett. "We have no reason to pull it."

Pac Bell filed its complaint with the California Public Utilities Commission, asking it to order a halt to the campaign.

"These ads are part of a continuing campaign by MCI to try to discredit Pacific Bell in the eyes of its customers," said Lee Bauman, Pacific Bell VP for local competition in a statement.

The feuds highlight the ever-increasing competition in the telecommunications arena. Long-distance companies and local providers will soon be entering each other's markets, and each is trying to sway consumers to choose them for all communications needs.

$90 BIL LOCAL PHONE MARKET

The long-distance market is estimated to be a $75 billion industry, while estimates for local phone service hover around $90 billion.

"MCI apparently believes that confusing customers is a legitimate competitive strategy. It is not," said Mr. Tauke.

The U.S. Telephone Association, a group that includes the seven regional Bells, GTE Corp. and about 1,000 other smaller providers of phone service, has created a counter ad campaign and a Web site dubbed "Call Them On It" (http://www.callthemonit.com).